Japanese exports plunged almost 10% in the first 20 days of October as bankruptcies soared, pushing Asia's largest economy deeper into a slump, a slew of gloomy data showed on Nov. 11.
Exports fell 9.9% in the first 20 days of October while imports rose 3.8%, leaving a trade deficit of 171.82 billion yen (US$1.76 billion), the finance ministry said.
The sharp drop in exports reflected a rapid deterioration in the global economy that has hammered Japanese corporate giants such as Toyota Motor and Sony, and caused more than 1,400 firms to go bust last month alone.
The economic crisis pushed 1,429 companies into bankruptcy in Japan in October, the most so far this year, a survey showed. Corporate bankruptcies soared 13.4% from a year earlier as companies struggled to raise funds amid the global credit crunch, according to Tokyo Shoko Research which conducted the survey.
"One factor behind the rising number of bankruptcy is that banks are reducing loans to companies," said Masashi Seki, an official at the research firm.
"The economy is getting more sluggish," Bank of Japan deputy governor Hirohide Yamaguchi said in parliament. "Since around the end of last year the economy has suffered various negative shocks from overseas."
The slump in exports contrasted with a small rise in September, when brisk shipments to the rest of Asia had offset a decline in demand in the U.S. and western Europe.A separate report showed Japan's current account surplus nearly halved in September from a year earlier amid sluggish exports.
Corporate Japan has been a key driver of a recovery in Asia's biggest economy after the recessions of the 1990s. Profits, however, are now sliding as the country teeters on the verge of recession and exports suffer from the global economic slowdown. "The factors behind the deterioration in the domestic economy have extended from sluggish exports to slowing domestic demand," said Kyohei Morita, chief Japan economist at Barclays Capital.
Ordinary Japanese are also growing gloomy. The government's Economy Watchers Survey, which gauges the mood among workers in Japan, slid to 22.6 in October from 28 in September. The survey's outlook index, which gauges expectations for the next two to three months, sank to the lowest level in more than seven years.
Copyright Agence France-Presse, 2008